What a Series LLC is, which states allow it, how it is taxed, whether it actually costs less than separate LLCs, how to structure and bank one, whether its liability isolation has held up in court, and the mistakes that destroy it.
The short answer: A Series LLC is one parent LLC holding multiple liability-isolated cells, cheaper than separate LLCs at scale. But inter-series isolation is largely untested in courts outside Delaware, so it holds only with disciplined per-series records.
Pick your situation to weigh cost against case-tested certainty.
A Series LLC is a single parent LLC that holds multiple protected series, each with its own assets and liabilities. One filing, one annual report, but multiple liability cells - originated in Delaware in 1996 and now in 22 states.
| Series LLC | Separate LLCs | Holding + LLCs | |
|---|---|---|---|
| Entities filed | 1 | N | 1 + N |
| Cost at scale | Lowest | Highest | High |
| Isolation certainty | Untested in most states | Decades of case law | Case-tested |
Source: state Series-LLC statutes and LLC case law, verified July 2026.
Twenty-two US states authorize Series LLCs by statute, led by Delaware, Texas, Illinois, and Wyoming. California and New York do not allow in-state formation but recognize foreign Series LLCs registered from another state.
| State | Series permitted? | Statute | Per-series filing? | Annual fee |
|---|---|---|---|---|
| Delaware | Yes | 6 Del. C. § 18-215 | No | $300 (parent) |
| Wyoming | Yes | W.S. § 17-29-1201 | No | $60 (parent) |
| Texas | Yes | Tex. BOC § 101.601 | No | Franchise (parent) |
| Illinois | Yes | 805 ILCS 180/37-40 | Yes (Certificate of Designation) | $75/series |
| Nevada | Yes | NRS 86.296 | No | $350 (parent) |
| California / New York | No (in-state) | - | Foreign only | - |
Source: state Series-LLC statutes, verified July 2026. 22 states plus DC and Puerto Rico authorize Series LLCs.
The most-used formation states are Delaware (the broadest case law), Texas and Illinois (real estate), and Wyoming (asset-protection focus, added 2018). Illinois requires a Certificate of Designation per series - which makes each series look like a separate entity to banks, so Illinois series bank more easily than Delaware or Wyoming cells that have no public filing.
Series LLC tax treatment is unsettled - the IRS proposed per-series treatment in 2010 but never finalized it. Operators use one of three consistent approaches: consolidate under the parent, classify each series separately, or treat series as disregarded sub-entities.
| Approach | How each series is treated | Filing |
|---|---|---|
| Consolidated | Under the parent's classification | One return (the parent) |
| Per-series classification | Each series elects its own | Separate returns per series |
| Parent partnership + disregarded series | Series disregarded under the parent | Parent Form 1065 |
Source: IRS Proposed Reg REG-119921-09 (2010, never finalized) and Treas. Reg. § 301.7701-3, verified July 2026.
The IRS issues an EIN to each series under Rev. Proc. 2015-24, so a series can bank and contract in its own name even though it is not a separately filed state entity. Get the parent EIN plus a per-series EIN for each cell you bank. Series-LLC tax prep is complex and the experienced-CPA bench is thin - a five-to-ten-cell Series LLC runs $1,500-$4,000 a year, above standard multi-member fees.
A Series LLC is roughly 70% cheaper at scale: one Wyoming filing at $397 versus ten separate LLCs at $3,970. The trade is certainty - separate LLCs have decades of case law; series isolation is largely untested.
| Factor | Series LLC | Separate LLCs (+ holding) |
|---|---|---|
| Formation cost (10 assets) | $397 | $3,970 |
| Annual cost (10 assets) | $160 | $1,600+ |
| Liability-isolation certainty | Untested in most states | Decades of case law |
| Banking acceptance | Inconsistent | Standard |
| Tax filing | Complex, thin CPA bench | Standard per LLC |
Source: state filing fees and market pricing, verified July 2026.
Most of the annual saving comes from paying one registered agent and filing one annual report, instead of ten of each.
A Series LLC needs a two-tier operating agreement - a master plus a sub-cell agreement per series - and a separate bank account, EIN, books, contracts, and insurance for each series. Commingling collapses the isolation.
| Per series | Required for isolation |
|---|---|
| Sub-cell operating agreement | Yes - cites the authorizing statute |
| Separate bank account | Yes - in the series' own EIN |
| Separate books | Yes - class or sub-account tracking |
| Contracts in the series' name | Yes - "Parent LLC - Series A" |
| Asset titling in the series' name | Yes - deed to the series, not the parent |
| Insurance naming the series | Yes - the series is the named insured |
Source: state Series-LLC statutes and piercing case law, verified July 2026.
The master operating agreement authorizes the series and cites the statute; each sub-cell agreement identifies its series, members, assets, and distributions, and invokes the statutory isolation language. Banks vary: Mercury, Relay, and Wise open series-level accounts; Chase and Bank of America hesitate on Delaware or Wyoming cells that have no public filing. Inter-series transfers move only as documented capital contributions or loans.
Barely tested. Delaware bankruptcy courts and the Fifth Circuit have upheld series isolation, but most decisions are unreported trial-court cases that pierced sloppy structures. Outside Delaware, the isolation is largely unproven.
| Case / pattern | Court | Result |
|---|---|---|
| In re Dominion Club at Pinehurst (2014) | Bankr. D. Del. | Upheld series as separate for bankruptcy |
| Alphonse v. Arch Bay Holdings (2013) | 5th Cir. (Delaware law) | Applied series-level analysis, no piercing |
| Unreported TX / IL cases | State trial courts | Pierced where records were commingled |
Source: reported and unreported Series-LLC decisions, verified July 2026.
Five mistakes pierce a Series LLC: commingling assets across series, skipping sub-cell agreements, forming in a non-series state, signing contracts in the parent's name, and buying blanket insurance instead of per-series coverage.
| Mistake | Fix |
|---|---|
| Commingled assets across series | Per-series banking and books |
| No sub-cell agreements | Draft one per series at creation |
| Formed in a non-series state | Confirm the state authorizes series |
| Contracts in the parent's name | Sign as the affected series |
| Blanket parent insurance | Name each series as the insured |
Source: Series-LLC piercing cases, verified July 2026.
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